LONG-TERM DEBT

Composition of long-term debt for Spire, Laclede Gas and Alagasco are shown in each registrant’s statements of capitalization as part of the financial statements. Maturities of long-term debt for Spire, Laclede Gas and Alagasco for the five fiscal years subsequent to September 30, 2016 are as follows:



	Spire		Laclede Gas		Alagasco
2017	$	250.0	$	—	$	—
2018	100.0		100.0		—
2019	180.0		50.0		—
2020	40.0		—		40.0
2021	55.0		—		—

Spire’s, Laclede Gas’ and Alagasco’s short-term credit facilities and long-term debt agreements contain customary covenants and default provisions. As of September 30, 2016, there were no events of default under these covenants.

The Company’s, Laclede Gas’, and Alagasco’s access to capital markets, including the commercial paper market, and their respective financing costs, may depend on the credit rating of the entity that is accessing the capital markets. The credit ratings of the Company, Laclede Gas and Alagasco remain at investment grade, but are subject to review and change by the rating agencies.

It is management’s view that the Company, Laclede Gas and Alagasco have adequate access to capital markets and will have sufficient capital resources, both internal and external, to meet anticipated capital requirements, which primarily include capital expenditures, interest payments on long-term debt, scheduled maturities of long-term debt, short-term seasonal needs, and dividends.

Spire

Spire entered into a master note purchase agreement on June 20, 2016, with certain institutional purchasers pursuant to which Spire issued a total of $165.0 unsecured notes in the private placement market. These notes were issued on September 9, 2016 to fund a portion of the purchase price for the EnergySouth acquisition and consisted of $35 million in aggregate principal amount of its unsecured Series 2016 Senior Notes, Tranche A, due September 1, 2021 (Tranche A Notes) and $130 million in aggregate principal amount of its unsecured Series 2016 Senior Notes, Tranche B, due September 1, 2026 (Tranche B Notes). Tranche A Notes and Tranche B Notes bear interest at a rate per annum of 2.52% and 3.13%, respectively.

At September 30, 2016, including the current portion but excluding unamortized discounts and net hedging gains, Spire had long-term debt totaling $2,085.8, of which $810.0 was issued by Laclede Gas, $250.0 was issued by Alagasco, and $67.0 was issued by other subsidiaries. With the exception of $250.0 floating rate senior notes issued by Spire, all long-term debt bears fixed rates and is subject to changes in fair value as market interest rates change. However, increases and decreases in fair value would impact earnings and cash flows only if the Company were to reacquire any of these issues in the open market prior to maturity. Under GAAP applicable to the Utilities’ regulated operations, losses or gains on early redemption of long-term debt typically would be deferred as regulatory assets or liabilities and amortized over a future period.

Of the Company’s $1,942.0 senior long-term debt (including the current portion) , $25.0 have no call options, $937.0 have make-whole call options, $250.0 is callable currently, and $730.0 are callable at par between one to six months prior to maturity. The remainder of the Company’s long-term debt is $143.8 of 2% Remarketable Junior Subordinated Notes due in 2022. None of the debt has put options.

Spire has a shelf registration statement on Form S-3 on file with the SEC for the issuance and sale of up to 168,698 shares of common stock under its Dividend Reinvestment and Direct Stock Purchase Plan. There were 106,535 and 101,439 at September 30, 2016 and November 11, 2016, respectively, remaining available for issuance under this Form S-3. Spire also has a shelf registration statement on Form S-3 on file with the SEC for the issuance of equity and debt securities.

The Company’s capitalization at September 30, 2016 consisted of 49.1% of Spire common stock equity and 50.9% long-term debt, compared to 47.0% of Spire common stock equity and 53.0% of long-term debt at September 30, 2015. The decline in the proportion of long-term debt is due primarily to the reclassification of $250.0 of Spire’s long-term debt to “current.”

Laclede Gas

At September 30, 2016, Laclede Gas had fixed-rate long-term debt, including the current portion, totaling $810.0. While these long-term debt issues are fixed-rate, they are subject to changes in fair value as market interest rates change. Of Laclede Gas’ $810.0 in long-term debt, $25.0 have no call options, $435.0 have make-whole call options and $350.0 are callable at par three to six months prior to maturity. None of the debt has any put options.

Laclede Gas has authority from the MoPSC to issue debt securities and preferred stock, including on a private placement basis, as well as to issue common stock, receive paid-in-capital, and enter into capital lease agreements, all for a total of up to $300.0 for financings placed any time before September 30, 2018. On March 31, 2016, Laclede Gas filed an appeal with Missouri’s Western District Court of Appeals challenging the level of authority. On July 20, 2016, Laclede Gas filed its initial brief in the appeal. Oral arguments are scheduled for November 17, 2016. During the year ended September 30, 2016, Laclede Gas issued no securities under this authorization, so that as of November 11, 2016, $300.0 remains available to be issued. On September 23, 2016, Laclede Gas filed a shelf registration on Form S-3 with the SEC for issuance of first mortgage bonds, unsecured debt, and preferred stock, which expires on September 22, 2019. The amount, timing, and type of additional financing to be issued under this shelf registration will depend on cash requirements and market conditions, as well as future MoPSC authorizations. This authorization is more fully described in Note 5, Stockholders’ Equity.

Laclede Gas’ capitalization at September 30, 2016 consisted of 56.9% of Laclede Gas common stock equity and 43.1% long-term debt compared to 56.2% of Laclede Gas common stock equity and 43.8% of long-term debt at September 30, 2015.

Substantially all of Laclede Gas’ plant is subject to the liens of its first mortgage bonds. The mortgage contains several restrictions on Laclede Gas’ ability to pay cash dividends on its common stock, which are described more fully in Note 5, Stockholders’ Equity.

Alagasco

Because Alagasco has no standing authority to issue long-term debt, it must petition the APSC for each planned issuance. On November 3, 2014, Alagasco received authorization and approval from the APSC to borrow $35.0 for the purpose of redeeming, without penalty, $34.8 in existing long-term, callable debt financed at 5.7%. Pursuant to a call notice issued on December 15, 2014, Alagasco redeemed $34.8 of debt effective January 15, 2015. On February 3, 2015, Alagasco received authorization and approval from the APSC to borrow $80.0 for the purpose of refinancing the scheduled maturity on December 1, 2015 of $80.0 of existing debt. Pursuant to these authorizations, Alagasco committed to issue $115.0 unsecured notes in the private placement market: $35.0 at a rate of 3.21% for 10 years issued on September 15, 2015, and $80.0 at a rate of 4.31% for 30 years issued on December 1, 2015. The Notes are senior unsecured obligations of Alagasco and rank equal in right to payment with all other senior unsecured indebtedness. Alagasco used the proceeds from the sale of the Notes to refinance existing indebtedness and for general corporate purposes.

At September 30, 2016, Alagasco had fixed-rate long-term debt totaling $250.0. While these long-term debt issues are fixed-rate, they are subject to changes in fair value as market interest rates change. All of Alagasco’s $250.0 long-term debt has make-whole call options.

Alagasco’s capitalization at September 30, 2016 consisted of 77.6% of Alagasco common stock equity and 22.4% long-term debt compared to 83.7% of Alagasco common stock equity and 16.3% of long-term debt at September 30, 2015.